Tuesday 28 / October / 2025
India's automotive sector is set to bolster its investment in South Africa with companies like Mahindra & Mahindra, undertaking to upgrade their existing assembly operations to full manufacturing plants and establishing new plants.
This was confirmed by South African Trade Industry and Competition Minister Parks Tau, who has been engaging Indian and Chinese auto manufacturers, as part of his government's efforts to attract major vehicle manufacturers to invest or increase their investment in the local automotive industry.
Filling the gap
His intervention comes amid threats to South Africa's auto manufacturing sector, through declining export demand due to tariffs, competition from cheaper imports, and local infrastructure challenges. Other significant challenges are low local content, weak domestic sales, and the global shift to new energy vehicles (NEVs).
US tariffs have led to a drop in vehicle exports, while a potential European Union (EU) ban on internal combustion engines threatens the industry's key export market, requiring a pivot to new energy vehicles.
East investors to the rescue
Tau told local industry players at a recent auto conference that “in both those markets, the companies that currently have SKD operations in South Africa have committed to transition from SKD (semi-knocked-down) to CKD (complete-knocked-down).”
He also revealed that investors in India and China were interested in partnering with existing car manufacturers to use excess capacity and build new factories in South Africa.
Safeguarding the future
Furthermore, Pretoria is in talks with multinational auto manufacturers, including Toyota and Ford and their suppliers, on ways to safeguard the industry's future as it navigates declining production volumes, stiff competition from China, tariff uncertainty and an expensive shift to electric vehicles.
Mahindra, which, together with Tata and Bajaj Auto, is among the leading Indian vehicle companies with a presence in South Africa, has agreed to upgrade from SKD to fully CK assemblies to boost local production and create a manufacturing hub.
Mahindra on the way, Tata partners
Mahindra has also shown interest in electric vehicle (EV) manufacturing and opening assembly facilities in Durban, following the South African government's undertaking to support these investments to strengthen the country's industrial base and position it as a manufacturing hub for Africa
Meanwhile, Tata Motors, which had stopped exporting cars to the African market around 2017, is partnering with Motus Holdings Ltd, South Africa's leading passenger vehicle retailer, to distribute its vehicles
